What Is a Business Continuity Plan (BCP)?

A BCP typically addresses data backup and recovery, alternative communication methods for reaching clients and staff, succession arrangements if key personnel become unavailable, and relationships with critical third parties like custodians and technology vendors. Firms are expected to test their BCP periodically — not just draft it once and file it away — and to update it as the firm’s operations, staff, or technology change.

Small firms sometimes underestimate what a BCP needs to cover, assuming it only applies to large-scale disasters, when regulators also expect it to address more routine disruptions like a single-person firm’s incapacitation or a local outage affecting client service.